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Bye, Bye Financial Repression, Hello Financial Deepening: The Anatomy of a Financial Boom

Author

Listed:
  • João Manoel Pinho de Mello

    (Department of Economics PUC-Rio)

  • Márcio Gomes Pinto Garcia

    (Department of Economics PUC-Rio)

Abstract

Since the conquest of hyperinflation, with the Real Plan, in 1994, the Brazilian financial system has grown from early infancy to late adolescence. We describe the process of maturing with emphasis on the defining features of the Brazilian financial system over the last 20 years: 1) stabilization and the subsequent financial crisis; 2) universality of banks; 3) market segmentation through public lending; 4) institutional improvement. Further paraphrasing Díaz Alejandro (1984), we raise some hypotheses on why, this time, the financial boom has not (at least yet) turned into a financial crash.

Suggested Citation

  • João Manoel Pinho de Mello & Márcio Gomes Pinto Garcia, 2011. "Bye, Bye Financial Repression, Hello Financial Deepening: The Anatomy of a Financial Boom," Textos para discussão 594, Department of Economics PUC-Rio (Brazil).
    • Handle: RePEc:rio:texdis:594
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    References listed on IDEAS

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    1. William Adams & Liran Einav & Jonathan Levin, 2009. "Liquidity Constraints and Imperfect Information in Subprime Lending," American Economic Review, American Economic Association, vol. 99(1), pages 49-84, March.
    2. Dionisio Dias Carneiro & Marcio Gomes Pinto Garcia, 1993. "Capital flows and monetary control under a domestic currency substitution regime: The recent Brazilian experience," Textos para discussão 304, Department of Economics PUC-Rio (Brazil).
    3. Joao Manoel Pinho de Mello & Marcio Garcia & Christiano Arrigoni, 2010. "Identifying the Bank Lending Channel in Brazil through Data Frequency," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Spring 20), pages 47-79, January.
    4. Cysne, Rubens Penha & Lisbôa, Paulo César Coimbra, 2004. "Imposto inflacionário e transferências inflacionárias no Brasil: 1947-2003," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 539, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    5. Dionisio Dias CArneiro & Rogério Ladeira Furquim Werneck & Marcio Gomes Pinto Garcia, 1993. "Strengthening the financial sector in the Brazilian economy," Textos para discussão 307, Department of Economics PUC-Rio (Brazil).
    6. Ana Carla A. Costa & João M. P. de Mello, 2006. "Judicial Risk and Credit Market Performance: Micro Evidence from Brazil Payroll Loans," Working Papers Series 102, Central Bank of Brazil, Research Department.
    7. Ana Carla A. Costa & João M. P. De Mello, 2008. "Judicial Risk and Credit Market Performance: Micro Evidence from Brazilian Payroll Loans," NBER Chapters, in: Financial Markets Volatility and Performance in Emerging Markets, pages 155-184, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Ana Abras & Guilherme G. C. Mattos, 2021. "Get Them While They Are Young," Journal of Financial Services Research, Springer;Western Finance Association, vol. 59(1), pages 97-113, April.
    2. Marco Bonomo & Ricardo Brito & Bruno Martins, 2014. "Macroeconomic and Financial Consequences of the After Crisis Government-Driven Credit Expansion in Brazil," Working Papers Series 378, Central Bank of Brazil, Research Department.
    3. Marco Bonomo & Ricardo Brito & Bruno Martins, 2015. "Macroeconomic and Financial Consequences of the Post-Crisis Government-Driven Credit Expansion in Brazil," IDB Publications (Working Papers) 88337, Inter-American Development Bank.
    4. Silva, Thiago Christiano & Tabak, Benjamin Miranda & Laiz, Marcela Tetzner, 2021. "The finance-growth nexus: The role of banks," Economic Systems, Elsevier, vol. 45(1).
    5. Bonomo, Marco & Brito, Ricardo D. & Martins, Bruno, 2015. "The after crisis government-driven credit expansion in Brazil: A firm level analysis," Journal of International Money and Finance, Elsevier, vol. 55(C), pages 111-134.
    6. Bertran, Maria Paula & Echeverry, David, 2021. "What is the size of credit card debt in Brazil? Reporting Thresholds, Interest Rates and Income Distribution," Journal of Behavioral and Experimental Finance, Elsevier, vol. 30(C).
    7. Philipp Ehrl, 2021. "Live large or die young: subsidized loans and firm survival in Brazil," Empirical Economics, Springer, vol. 61(6), pages 3479-3503, December.

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    More about this item

    Keywords

    Financial repression; financial deepening; stabilization; stability; financial crisis; stability. Jel Codes: G21; G28; G32;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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